Skypoint Advisors, LLC. v. 3 Amigos Productions LLC. et al

Filing 153

ORDER denying 135 Motion for Sanctions. Signed by Judge John E. Steele on 2/3/2020. (FWH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SKYPOINT ADVISORS, LLC.,
Plaintiff/Counter
Defendant,
v.

Case No:

2:18-cv-356-FtM-29MRM

3 AMIGOS PRODUCTIONS LLC.,
BLACKBURNSTEELE LLC., ISSA
ZAROUI, and MARK C CRAWFORD,
Defendants/
Counterclaimants.

3 AMIGOS PRODUCTIONS LLC.,
BLACKBURNSTEELE LLC., ISSA
ZAROUI, and MARK C CRAWFORD,
Third-Party
Plaintiffs,
v.
DENIS DRENI,
Third-Party
Defendant.

ORDER AND OPINION
This matter comes before the Court on plaintiff’s Motion for
Sanctions Under Rule 11 (Doc. #135) filed on October 21, 2019.
Defendants have not filed a response and the time to do so has
passed.

For the reasons that follow, the motion is denied.
I.

Plaintiff Skypoint Advisors, LLC (Skypoint) is a Florida

limited

liability

company

whose

defendant Denis Dreni (Dreni).

members

include

third-party

(Doc. #93, p. 1.)

Skypoint’s

Third Amended Complaint (Doc. #93) against 3 Amigos Productions,
LLC, BlackburnSteele, LLC, Issa Zaroui, and Mark Crawford, 1 alleges
defendants made misrepresentations to induce Skypoint to invest in
a film project.

(Id. pp. 2, 4-26.)

In August 2019, defendants filed their Counterclaims (Doc.
#122) against Skypoint and Dreni.

The Counterclaims asserted

claims of defamation, violation of the Stored Communications Act,
18 U.S.C. § 2707, and tortious interference with a contract against
Skypoint and Dreni jointly and severally.

(Doc. #122, pp. 26-29.)

On October 21, 2019, Skypoint filed two motions, the first being
the Motion for Sanctions currently before the Court.

(Doc. #135.)

In the motion, Skypoint asserts defendants’ Stored Communications Act
claim and tortious interference claim are “objectively frivolous,
untenable, and without evidentiary support.”

(Id. pp. 5, 10.)

Skypoint argues defendants’ counsel should have known the claims were
frivolous and therefore the Court must impose sanctions.
9, 13.)

(Id. pp.

As a basis for this argument, Skypoint provides declarations

by Dreni and non-party William Kaufman that challenge the factual
basis for the two claims.

(Doc. #135, pp. 17, 29.)

1

The second

Per the Third Amended Complaint, BlackburnSteele and Zaroui
are managing members of 3 Amigos, and Crawford is the managing
member of BlackburnSteele. (Doc. #93, p. 2.)

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motion was Skypoint’s Motion to Dismiss Counterclaims, which argued,
inter alia, that the Stored Communications Act claim and tortious
interference claim should be dismissed for failing to state a cause
of action.

(Doc. #136, p. 2.)

Skypoint based these arguments on

the same declarations it attached to the sanctions motion.

(Id. pp.

20, 32.)
On November 4, 2019, defendants moved for an extension of time
to respond to the sanctions motion.

(Doc. #140.)

Defendants argued

that because the Rule 11 motion was “essentially a repetition of the
challenges asserted in the motion to dismiss, with an additional
request for sanctions,” responding to the motion prior to the Court
ruling on the motion to dismiss “would be a waste of time and judicial
resources.”

(Id. p. 2.)

The Court granted the motion, requiring

defendants to respond to the sanctions motion within fourteen days
of the Court ruling on the motion to dismiss.

(Doc. #143.)

On January 7, 2020, the Court granted in part and denied in part
Skypoint’s motion to dismiss.

(Doc. #151.)

Regarding the failure

to state a claim arguments, the Court found that because defendants
challenged the truthfulness and authenticity of the declarations and
their attachments, the Court would not consider them on a motion to
dismiss.

(Id. pp. 8-9, 12-14); see also Horsley v. Feldt, 304 F.3d

1125, 1134 (11th Cir. 2002) (providing that a document attached to
a

motion

to

dismiss

may

be

considered

by

the

court

without

converting the motion into one for summary judgment only if the
attached document is “(1) central to the plaintiff’s claim” and

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“(2) undisputed”).

The Court now turns to Skypoint’s motion for

sanctions. 2

II.
“Rule 11 sanctions

are

proper

(1)

when

a

party

files

a

pleading that has no reasonable factual basis; (2) when the party
files a pleading that is based on a legal theory that has no
reasonable chance of success and that cannot be advanced as a
reasonable argument to change existing law; or (3) when the party
files a pleading in bad faith for an improper purpose.”

Worldwide

Primates, Inc. v. McGreal, 87 F.3d 1252, 1254 (11th Cir. 1996)
(citation and marks omitted).
Rule 11 does not change the liberal notice pleading
regime of the federal courts or the requirement of Fed.
R. Civ. P. 8, which demands only a “short and plain
statement of the claim.” The rule does not require that
pleadings allege all material facts or the exact
articulation of the legal theories upon which the case
will be based.
The reasonable inquiry standard
of Rule 11 does
not
preclude
plaintiffs
from
establishing the merits of claims through discovery.
Nor is Rule 11 intended to chill innovative theories and
vigorous advocacy that bring about vital and positive
changes in the law.
Donaldson v. Clark, 819 F.2d 1551, 1561 (11th Cir. 1987).

2

As noted, defendants have not filed a response to the motion
for sanctions despite being ordered to do so.
(Doc. #143.)
However, defendants did incorrectly state in the motion for an
extension of time that “[s]hould the Court deny the motion to
dismiss, the Rule 11 Motion will be moot and no response is
warranted.” (Doc. #140, p. 1.)

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In the motion, Skypoint argues defendants’ assertions of a
violation of the Store Communication Act and tortious interference
are “objectively frivolous” based on the statements made in the
declarations.

(Doc. #135, pp. 8, 13.)

Skypoint further states

that upon service of the motion, defendants should have known the
claims were untenable and counsel had an obligation to no longer
pursue them. 3

(Id. pp. 9, 13.)

The Court disagrees.

As noted,

defendants have disputed the truthfulness of the declarations and
the authenticity of the declarations’ attachments.
pp. 7-8, 9-10.)

(Doc. #137,

Furthermore, defendants submitted their own

declarations which contradict the assertions made in Skypoint’s
declarations.

(Doc. #137-1; Doc. #137-2.)

Because there is a

factual dispute between the parties as to the events that gave
rise

to

the

inappropriate.

lawsuit,

the

Court

finds

Rule

11

sanctions

are

See Mitchell v. Int’l Consol. Cos., Inc., 2014 WL

6997609, *5 (S.D. Fla. Dec. 10, 2014) (“Rule 11 sanctions are not
appropriate merely because factual disputes regarding allegations
in a pleading exist.”); Cabrera v. Goodyear Tire & Rubber Co.,
2011

WL

535103,

*2

(S.D.

Fla.

Feb.

8,

2011)

(“Although

the

affidavits by Mr. Flores and Mr. Galeano are probative evidence

3

Based on the certificate of service, Skypoint served the
sanctions motion on defendants more than twenty-one days prior to
filing the motion with the Court (Doc. #135, pp. 14-15), thereby
meeting Rule 11’s “safe harbor” requirements, see Fed. R. Civ. P.
11(c)(2).

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against the plaintiffs’ claims, the parties’ conflicting accounts
of what happened simply demonstrate that there are fact disputes
that, if resolved in favor of the plaintiffs, may allow them to
prevail.

In

any

event,

the

defendants

have

not

met

their

relatively high burden of showing the lawsuit is so baseless in
law or fact to justify Rule 11 sanctions.”).
Accordingly, it is hereby
ORDERED:
Plaintiff’s Motion for Sanctions Under Rule 11 (Doc. #135) is
DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
February, 2020.

Copies:
Counsel of Record

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3rd

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